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Britain’s financial services minister Andrew Griffith has firmly rejected the proposal to regulate cryptoassets under the same framework as gambling.

The suggestion to classify cryptocurrencies as gambling, as recommended by the UK Treasury Committee in May, has been met with strong opposition from Griffith.

One of Griffith’s main concerns is the potential discord this move could create between the UK and international regulatory bodies, including those in the European Union.

He also argued that such categorisation would not effectively address the risks associated with the crypto sector.

In his reply, Griffith stated that he “firmly disagrees” with the Committee’s recommendation to regulate “retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service”.

He emphasised that globally agreed-upon recommendations from organisations such as the International Organisation of Securities Commissions (IOSCO) and the G20 Financial Stability Board (FSB) support the current financial regulatory approach.

Griffith explained that these recommendations follow the principle of “same activity, same risk, same regulatory outcome”.

In other words, any cryptoasset activity with similar functions and risks to traditional financial systems should be subject to regulations ensuring equivalent outcomes.

Overlapping mandates

He warned that the proposed approach could lead to confusion and overlapping mandates between financial regulators and the Gambling Commission.

The UK government further clarified that the Gambling Commission is well-equipped to safeguard consumers in the context of gambling activities but lacks expertise in overseeing financial risks akin to those present in financial markets.

As the cryptoasset industry is highly globalised and borderless, the UK’s unilateral adoption of a different regulatory system could “push cryptoasset activity offshore”, exposing consumers to residual risks.

Instead of classifying cryptoassets as gambling, the UK government believes that a financial services regulatory framework is more appropriate for addressing the risks associated with unbacked cryptocurrencies while fostering safe innovation.

Measures are being taken to mitigate consumer risks, including the risks of misinformation.

To this end, the government has introduced a dedicated financial promotions regulatory regime for cryptoassets, with legislation set to come into force by late 2023.

The UK Treasury Committee has called for the consumer trading of cryptocurrencies such as Bitcoin to be regulated as gambling.

A cross-party committee of British MPs has determined that cryptocurrencies such as Bitcoin “lack intrinsic value and fail to serve any meaningful social purpose”.

Moreover, the report points to negatives including the high energy consumption of cryptocurrencies and their potential exploitation by criminals in scams, fraud and money laundering.

Unbacked cryptoassets, commonly known as cryptocurrencies, constitute the most prominent form of digital currency.

The two most popular cryptoassets, Bitcoin and Ether, currently account for approximately two-thirds of the overall cryptocurrency market.

The committee believes these cryptocurrencies pose significant risks to consumers due to their price volatility and the potential for substantial losses.

MPs have therefore urged the government to classify the retail trading of crypto as gambling, as it would then be subject to what the group considers “appropriate” regulations.

One of the committee’s major concerns is the potential “halo” effect created by regulating crypto trading as a financial service, as previously proposed by the government.

The group fears that such regulation could mislead consumers into perceiving the activity as safe and protected, in contrast to its inherent risks.

HM Revenue & Customs data shows that approximately 10% of UK adults currently hold or have held cryptoassets, a figure which underscores the need for effective safeguards and regulations to protect individuals engaging in crypto trading, according to the committee.

The report does acknowledge the potential benefits of the underlying technologies of cryptoassets, particularly in cross-border transactions and less developed countries.

The report has also cautioned against the allocation of public resources to projects lacking clear and beneficial use cases, such as the now-abandoned Royal Mint NFT scheme.

The committee has advised the government to adopt a balanced approach to supporting the development of cryptoasset technologies and avoid promoting technological innovations “solely for the sake of innovation”.

Harriett Baldwin MP, chair of the Treasury Committee, said: “The events of 2022 have highlighted the risks posed to consumers by the cryptoasset industry, large parts of which remain a wild west.

“Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the UK’s financial services industry.

“However, with no intrinsic value, huge price volatility, and no discernible social good, consumer trading of cryptocurrencies like Bitcoin more closely resembles gambling than a financial service and should be regulated as such.

“By betting on these unbacked ‘tokens,’ consumers should be aware that all their money could be lost,” she added.

As the crypto industry continues to evolve rapidly, both inside and outside of gambling, it remains to be seen how the government will respond to these recommendations.

The full report can be accessed here.

The UK Gambling Commission (UKGC) is now “fully focused” on implementing the regulatory changes as outlined in the government’s white paper review.

In a blog post published 3 May, UKGC executive director for research and policy Tim Miller confirmed the white paper delegated more than 60 areas of work to the regulator alone.

He admitted the gambling overhaul – which is the biggest in Britain since 2005 – would “likely take a number of years to fully complete.”

The UKGC has been tasked with leading consultations this summer on many of the key recommendations, from more prescriptive guidance on customer affordability checks to making online games safer by design by reviewing their riskier features and speed.

Despite the intimidating to-do list, Miller said the Commission was already targeting “rapid progress in a number of key areas.”

Slow and steady

“Already, project teams have been pulled together to start work on the various recommendations that the white paper has made and where actions have been set out for the Commission,” he wrote.

Many of the white paper objectives will be delivered through amendments to the Licence Conditions and Codes of Practice (LCCP) which are overseen and implemented by the UKGC.

Miller said the LCCP acts as the “rule book” for UK-licensed gambling operators and that the UKGC was legally obliged to consult on and consider any changes before implementing them.

These consultations are scheduled to begin in the summer.

Other recommendations, such as the reduced stake limit for online slots, will be decided by government consultation with secondary legislation set to be passed down.

“Importantly, these consultations will be sharply focused on how changes are implemented,” wrote Miller, insisting that questions of public policy had now been settled by the white paper.  

“Where they have, our consultations will not be an opportunity to reopen those debates,” he added.

While the UKGC is eager to make swift progress, Miller said the practical reality of the final changes should only come after listening to a wide variety of experiences and expertise.

“History shows too many examples of well-meaning policy changes having unintended consequences for the public due to the way they were implemented in the real world,” said Miller.

“We will not want to make that mistake,” he added.

The task at hand

Miller’s update comes after public criticism of the regulator in some forums following publication of the white paper seven days ago.

Dan Waugh, partner at strategic advisory firm Regulus Partners, said DCMS had put together a “decent set of proposals” while being interviewed by Nigel Farage on GBNews.

However, he added: “The most worrying thing is that a lot of this now gets kicked to consultation and will eventually be implemented by the regulator.

“It will happen outside of parliamentary scrutiny, and the regulator’s track record on these consultations is not very strong.”

Finally, Miller said an immediate focus on the white paper recommendations would not distract the UKGC from continuing to ensure compliance with existing requirements.

“Where gambling operators fail to meet our standards, we will continue to take action to protect consumers and raise standards,” he added.

As the dust settles on the UK government’s white paper, gambling industry stakeholders have had their say on the biggest proposed shake-up of regulation in nearly two decades.

The long-awaited white paper on the review of the UK’s 2005 Gambling Act is finally here.

In a press release announcing the overhaul, the UK government’s Department for Culture, Media & Sport (DCMS) had this to say: “Betting companies are already required to prevent harm, but there have been repeated instances where they have allowed losses which the majority of the population could never afford.

“The measures set out today will shield players in the grip of addiction from harm and hold gambling firms to account when they fail in their responsibility.”

Those measures are explained in more detail below.

Statutory gambling operator levy

A statutory gambling operator levy will be enforced to ensure that operators help fund treatment services and research for gambling harm and addiction, including through the NHS. ​

That contribution is currently voluntary and not mandated and was deemed “not fit for purpose” by the government, with some betting companies pledging as little as £1 in RET donations.

The compulsory rate will only be confirmed after further consultations and will take into account business size, operating costs and problem gambling rates. A 1% tax on GGR appears most likely.

The levy will be collected by the Gambling Commission (UKGC) and spending will need to be approved by the Government.

New online stake limit

A new stake limit for online slots will be introduced with the default maximum stake of between £2 and £15 per spin. Again these limits are subject to consultation.

The limits will help to prevent “runaway and life-changing losses” according to the government, while helping to level the playing field between the online and land-based sectors.

As it stands, there is no limit on bets for online slots, whereas in-person slot machines in pubs, arcades and bookmakers have a limit of £2 and casinos have limits of up to £5.

Some of the UK’s biggest licensed operators have already introduced slots limits of between £5 and £15, including Flutter, 888 and Entain, among others.

The £2 per spin stake limit may only apply to under-25s and will be finalised after consultation.

Player protection checks

Note the much-used “affordability checks” phrasing has not been used here by the government.

The white paper states that gambling operators will now be required to do more to protect customers.

Betting companies will be required to conduct player protection checks on the highest spending cohorts to check they are not racking up harmful losses.

The Gambling Commission will consult on two forms of financial risk check. Firstly, background checks at moderate levels of spend, to take place at £125 net loss within a month or £500 within a year.

Second, at proposed thresholds of £1,000 net loss within 24 hours or £2,000 within 90 days, there should be “more detailed” checks for a customer’s financial position.

These thresholds could again be halved for those aged between 18 and 24.

Guidance states these checks should happen instantaneously and should not impact gameplay, unless there are signs of financial harm.

“The checks will be targeted to where there is the most risk of harm,” said DCMS in a statement. “They are not about checking up on people having a flutter on the football or placing the odd bet on horse racing.”

The government has suggested that around eight in 10 gamblers will never reach the threshold for these checks, with around 3% of accounts likely to incur more detailed checks due to high spending.

New Gambling Commission powers

The government has confirmed that new powers will be granted to the UKGC to tackle and block unlicensed black market gambling firms from targeting the UK. This was a major concern of the regulated industry and leading operators will be delighted to see its inclusion in the white paper.

This clampdown will be enforced through court orders requests made to ISPs, which have been carried out with varying degrees of success in other markets, including Australia and Germany, among others.

The review has also proposed reforming the fee structure for the regulator to give it “greater flexibility” to respond to emerging risks and challenges posed by the industry.

Bonus restrictions

According to DCMS, those suffering from gambling addiction and harm are at greater risk from certain aggressive advertising practices.

As a result, the UKGC will take a closer look at how bonuses, including free bets or spins, can drive harmful behaviour and trigger people to spend more than they intended.

New industry ombudsman

The government has committed to working with the industry and all relevant stakeholders to create a new independent ombudsman for gambling dispute resolutions.

Around 2,000 consumer complaints per year are registered with dispute resolution providers and the UKGC.

These most often relate to social responsibility breaches, gambling harm and safer gambling.

“At present, customers seeking personal redress currently have no choice but to pursue potentially costly and uncertain court action,” said DCMS.

The new body will adjudicate complaints relating to social responsibility or gambling harm where an operator is not able to resolve the case.

The government expects the new ombudsman to be accepting complaints within one year.

Plans to relax land-based regulations

The UK government plans to reset regulation for land-based gambling while maintaining safeguards to protect vulnerable groups from harm.

Proposed changes include increasing machine allowances in casinos, allowing sports betting alongside other activities, and permitting credit to non-UK residents subject to AML checks.

The government also pledged to work with the Gambling Commission to develop cashless payments on gaming machines, including adequate player protection measures.

The proposed changes for the land-based sector were welcome news for investors. The share price of Rank Group, which generates approximately 70% of its revenue in land-based venues, increased by nearly 6% upon the publication of the white paper.

What they said

UK culture secretary Lucy Frazer: “We live in an age where people have a virtual mobile casino in their pockets. It has made gambling easier, quicker and often more fun, but when things go wrong it can see people lose thousands of pounds in a few swipes of the screen.

“We are stepping in to update the law for those most at risk of harm. This will strengthen the safety net and help deliver our long-term plan to help build stronger communities while allowing millions of people to continue to play safely.”

Gambling Commission CEO Andrew Rhodes described the review as a “once-in-a-generation opportunity” to deliver positive change for gambling in Great Britain.

He added: “Given the correct powers and resources, the Gambling Commission can continue to make gambling safer, fairer and crime free.

“This white paper is a coherent package of proposals which we believe can significantly support and protect consumers, and improve overall standards in the industry.”

Consultations over conclusions

The fact that further consultations are required for most of the major restrictions in the review will anger the strongest proponents for gambling reform.

Tory MP and former party leader Iain Duncan Smith described the government’s plans to continue undertaking consultations as “a cop-out.” 

“I just don’t know what we’ve got to consult on any longer. What is there we don’t know about the gambling industry, and their abuses?” he asked.

“If the government does this then it has itself open to the charge that they have caved in to the lobbying. I know this is my party’s government, but you will then have to ask how many ministers have accepted hospitality.”

The published white paper follows a call for evidence and is based on nearly 16,000 written submissions sent to DCMS during a process spanning more than two years.

It can be read in full here.

Premier League clubs have mutually agreed to withdraw front-of-shirt gambling sponsorships.

The announcement – which had been expected for some time – comes after an extensive consultation involving the Premier League and its 20 clubs, as well as the UK government’s Department for Culture, Media and Sport (DCMS) as part of the Gambling Act review.

The review has been in the works for more than two years, but could now be published as soon as Monday, according to sources.

The top-flight shirt ban will apply from the 2026/27 season and clubs are permitted to strike gambling sponsorship deals with companies between now and then.

Gambling brands and logos will still be allowed to appear on shirts after the 2026/27 season, but not on the front of shirts.

The premier league have recognised that gambling adverts on football shirts cause gambling harm. BUT won’t remove the adverts from the pitch side or shirt sleeves. Despite recognising it causes harm. ( fixed that for you @premierleague ) https://t.co/dCj0Y16GNP

— Ronnie Cowan MP (@ronniecowan) April 13, 2023

Sleeve sponsors and training wear sponsors will still be permitted, as will gambling marketing on advertising hoardings in stadiums during matches.

Eight top-flight clubs are currently sponsored by gambling companies. They are West Ham (Betway), Southampton (Sportsbet.io), Newcastle (Fun88), Leeds (SBOTOP), Fulham (BetVictor), Everton (Stake.com), Brentford (Hollywood Bets) and Bournemouth (Dafabet).

Those deals combined have an estimated value per season of £60m.

In a statement, the Premier League said it had become the first sports league in the UK to take such a measure voluntarily and would now work with other sports on the development of a new code for responsible gambling sponsorship.

The English Football League, which consists of 72 clubs and three divisions, is currently sponsored by Sky Bet. It has not been included in the front-of-shirt ban.

More to follow…

Conservative MP Scott Benton has been caught offering to leak confidential policy documents and lobby ministers on behalf of the gambling industry.

As revealed in an undercover exclusive investigation by The Times, the MP for Blackpool South violated the rules prohibiting MPs from lobbying in return for payment and disregarded new restrictions for politicians on providing parliamentary advice.

During the undercover sting, Benton believed he was liaising with two representatives from Tahr Partners, a fake British-Indian family office that feigned interest in investing in the betting and gaming sector.

During a meeting at a central London hotel last month, Benton detailed his willingness to leverage his position to aid their business and attempt to dilute proposed gambling reforms.

Specifically, he guaranteed that he could leak the forthcoming white paper on gambling reforms to the company at least 48 hours before its public release.

This would potentially enable them to capitalise on market-sensitive information, as the results of the review could have a substantial impact on the price of gambling stocks.

He also offered to submit parliamentary questions on behalf of the industry and bragged about “easy access to ministers”.

Scott Benton appeared willing to break multiple parliamentary rules when he met to discuss a job advising a fake investment fund. But I understand tthe Tories have tonight decided NOT to remove the whip (as Labour are calling for) at this stage https://t.co/wDg3ZBE3l9 pic.twitter.com/qDS3VavwHy

— Billy Kenber (@billykenber) April 5, 2023

Finally, Benton said he could “call in favours” from colleagues who would be glad to support the fake company’s interests, and even offered to put on a dinner at the House of Commons.

For years, MPs have been banned from acting as paid lobbyists or accepting money to raise issues with ministers or ask questions in Parliament on behalf of clients.

Benton’s proposed actions would constitute a breach of both the longstanding rules against “paid advocacy” and the new restrictions on providing parliamentary advice.

Benton has since had the Tory party whip suspended while an investigation is underway.

The Times said this incident highlights the extensive lobbying campaign led by betting companies in Westminster, which has seen more than £180,000 spent on corporate hospitality for dozens of MPs since 2021 in a bid to sway the review in their favour.

The government’s long-awaited white paper is now expected to be published after the Easter recess, having initially been launched in 2020 when Boris Johnson was PM.

To carry out its investigation, The Times set up a fake company, complete with a logo, website, and office addresses in London and Chennai.

Elsewhere, The Sun has leaked further details from the yet-to-be-published review after it claimed to have gained access to cabinet documents.

The tabloid suggests the previously mooted £2 limit per spin for online casino will only apply to those under the age of 25.

Two years, three months, and 28 days. That is how long it’s been since the UK government’s then culture secretary first announced a review into gambling.

And we are all still waiting for the results. It feels like there have been at least 50 ministers responsible for gambling in that time, as well as three whole prime ministers.

The white paper on this topic has been sent to the back of the filing cabinet under each PM, all of whom had more pressing priorities.

These have ranged from negotiating Brexit and navigating an unprecedented global health crisis, to partying during a police-enforced public lockdown and trying to outlast a lettuce.

Each of the above had one thing in common, despite varying degrees of success; they were all deemed more important than publishing new regulations for gambling in Great Britain.

People are rightly pissed off with the delay, which has primarily impacted two groups.

On the one side, you have the nation’s regulated gambling industry, which has been left in limbo over its future operating conditions, and uncertainty is never good for business.

“I, meanwhile, count myself as a not-so-proud member of a third group – the I Am Just So Sick And Tired Of Hearing About The Gambling Act Review group. It is free to join, by the way.”

On the other side you have gambling reform campaigners and disordered gamblers, many of whom were chauffeured down the long road to ruin by the industry’s biggest brands.

I, meanwhile, count myself as a not-so-proud member of a third group – the I Am Just So Sick And Tired Of Hearing About The Gambling Act Review group. It is free to join, by the way.

The government’s review of gambling regulation has taken such a long time that people on all sides have become numb to the very mention of it. We’re just so bored of waiting.

Because of that, the impact of the new regulations will be greatly reduced. It doesn’t help that they have been drip fed for the best part of 850 days to serve interests on both sides.

We already know what is going to happen. Premier League clubs will agree to remove betting logos from shirts, a mandatory levy for RET services will be enforced, and affordability checks will be tightened. But most of these have already happened.

So often in this industry the devil is in the detail, but that might not be the case this time around, and we could be staring down the barrel of an almighty anti-climax.

It will be just like going out on New Year’s Eve. All that anticipation, all that excitement and all that sense of occasion, only to be deeply disappointed by a damp squib of a non-event.

“So often in this industry the devil is in the detail, but that might not be the case this time around, and we could be staring down the barrel of an almighty anti-climax.”

Spontaneous nights out are the ones we remember. Those with no expectation and no pre-planning. Perhaps the government should go rogue and introduce an overnight ban on gambling on horse racing.

That would spice things up a bit, if only for the reaction of the Racing Post.

There is is no danger of that though. Sunak has already shown his pro-business approach as chancellor and the treasury needs every pound it can get. He is also constituency MP for Catterick Racecourse in North Yorkshire, so please put down your pitchforks. I was only joking.

When it does eventually get published, when we’re grey and old, the review’s recommendations are likely to dissatisfy both sides of the debate.

The best result for the rest of us is that we will no longer have to hear about it.

The UK government’s long-awaited gambling act review white paper looks set to be sidelined until at least February 2023.

The latest setback comes amid the formation of a committee of MPs from the Department of Culture, Media, and Sport (DCMS) to examine the regulation of gambling in the UK.

The new committee will investigate the progress the government has made in addressing gambling-related harm by the Public Accounts Committee, National Audit Office and House of Lords Committee, among others.

The investigation was announced yesterday (21 December) after the government’s review of the Gambling Act 2005 concluded last year with a white paper on regulatory reforms set to be published, although it has now been delayed on several separate occasions.

Any further postponement will frustrate gambling harm campaigners and also the licensed gambling industry, which has been waiting for confirmation and clarity for well over a year.

The newly formed DCMS committee is inviting stakeholders to provide written evidence up until 10 February 2023. The written responses would become largely irrelevant in legislative terms should the government’s white paper be published in advance of that date.

DCMS Committee member and Labour MP Julie Elliott: “The DCMS Committee’s inquiry will look at the scale of gambling-related harm in the UK, what the government should do about it and how a regulatory regime can best adapt to new forms of online gambling, based both in and outside the UK.” 

Topics up for discussion include the scale of gambling-related harm in the UK and the key priorities set to be addressed in the government’s white paper, as well as exploring any problems that may occur when a gambling company is based outside of the UK.

DCMS Committee member and Labour MP Julie Elliott said: “Gambling acts as an enjoyable pastime for large numbers of players, but regulation is struggling to keep pace with the rapidly changing way in which it happens today.

“This puts people at risk of the devastating harm it can sometimes cause to lives. The DCMS Committee’s inquiry will look at the scale of gambling-related harm in the UK, what the government should do about it and how a regulatory regime can best adapt to new forms of online gambling, based both in and outside the UK,” she added.

Representatives of the UK gambling industry have been told that “nobody is going to get everything they want” from the government’s gambling review, according to Tuesday’s Racing Post.

Those words came from Paul Scully – the UK MP with responsibility for gambling at DCMS – who was speaking at a House of Commons reception on Monday partly organised by UK trade body the Betting and Gaming Council (BGC).

Scully did not give any indication as to when the white paper will be published.

UK gambling minister Paul Scully has suggested the Gambling Act review could change the way that operators communicate the potential harms of gambling to their customers.

The minister for gambling has become a revolving door of a role in the UK. Scully became the third incumbent this year when his appointment was confirmed in October 2022.

Scully delivered a speech to the UK gambling industry and its stakeholders at the annual GambleAware conference on 7 December.

He said that communicating the risks associated with gambling had been identified as an “essential public health intervention”.

Strengthening this message could be a likely impact of the long-awaited publication of the country’s Gambling Act review, which has been ongoing for the best part of two years now.

“I commend GambleAware for the work they continue to do to raise awareness of risks and the support available,” said Scully.

“We’re also looking at this in the Review, analysing what is most effective when it comes to communicating the potential harms of gambling,” he added.

UK gambling minister Paul Scully: “Having a greater public awareness of the potential harms and equally the sources of support is so important.”

Scully revealed he was aware of recent developments in Australia, where licensed operators have been ordered to shelve the “gamble responsibly” advertising tagline in favour of seven stricter safer gambling mottos from March 2023.

The new taglines include “chances are you’re about to lose” and “imagine what you could be buying instead”.

Scully said the UK could look to amend the mandated messaging on responsible gambling as a result of the review, which now looks unlikely to be published before Christmas.

“We are considering these developments and others very closely and want a solution that works for our own country.

“But having a greater public awareness of the potential harms and equally the sources of support is so important,” he added.

Shadow gambling minister and Labour MP Alex Davies-Jones also spoke at the annual GambleAware conference.

She said she was concerned by the “lax attitude of the government in bringing forward the white paper”.